"On Feb. 10, 2016, we had our factory inside the Kaesong Industrial Complex, which we had nurtured like our own child, taken away overnight. Since then, the corporations in the complex have suffered management hardships, and now more than 30% are in a state of suspension or closure." (Cho Kyung-joo, head of the Kaesong Industrial Complex Corporation Association)
On the morning of the 10th, in front of the gate of the Dorasan Customs, Immigration and Quarantine (CIQ) office in Paju, Gyeonggi Province. Against the backdrop of the vehicle inspection gate, the last checkpoint before entering North Korea, the Kaesong Industrial Complex Corporation Association held a press conference. Marking 10 years since the full suspension of the Kaesong Industrial Complex on this day, the association, made up of corporations that moved into the complex, released an appeal titled "We want to go to the Kaesong Industrial Complex," and urged the government to restart the complex and prepare support measures for the tenant corporations.
About 80 executives and employees from 38 corporations that had moved into the Kaesong Industrial Complex attended the press conference. They shared the reality of having endured the past 10 years for corporate survival and recovery after the suspension of operations at the complex, and said many corporations have ultimately ended up suspending or shutting down.
The Kaesong Industrial Complex, which began operations in 2004, served as a major production base for domestic small and midsize corporations thanks to relatively low-cost labor. At the same time, it was regarded as a flagship project symbolizing inter-Korean economic cooperation. However, amid shifts in inter-Korean relations, operations were repeatedly halted and resumed, and on Feb. 10, 2016, it was completely closed.
Park Yong-man, head of Green Fiber, which moved into the Kaesong Industrial Complex in Feb. 2007, said, "Even after the full suspension in 2016, I held on with the single belief that someday we could return." Park said, "The company is effectively in suspension, but everything to which I dedicated my youth is there," adding, "Even after 10 years, I cannot give up on the Kaesong Industrial Complex."
Another tenant corporation representative said, "Every time the administration changed, the policy on the Kaesong Industrial Complex shifted 180 degrees, and we went through cycles of despair and hope."
The Kaesong Industrial Complex Corporation Association called on the Korean government to provide practical compensation and measures for the survival of tenant corporations. Chair Cho Kyung-joo said, "The Kaesong Industrial Complex was the foundation of life for our businesspeople and the front line of inter-Korean economic cooperation," adding that it was "a space that, along with a sense of mission, gave us pride in having directly experienced a 'small unification.'" Cho went on to say, "As the Kaesong Industrial Complex has served as a safety valve in inter-Korean relations, it is time for the government to recognize its historical and policy significance again and take action."
After operations at the Kaesong Industrial Complex were suspended in 2016, the government calculated losses suffered by tenant corporations at a total of 708.7 billion won, dividing them into investment assets such as land, buildings and machinery and equipment, and current assets such as raw and subsidiary materials, and provided 578.7 billion won in support mainly to corporations enrolled in inter-Korean economic cooperation insurance. In response, the Kaesong Industrial Complex Corporation Association argues that an additional 130 billion won in support is needed for the remainder.
The government, on the other hand, says that amount reflects losses suffered by corporations that were not insured or that exceeded support limits, and that additional support is difficult. The government added that it provided support to uninsured corporations for 45% of investment assets and 90% of current assets, respectively.
Kim Jin-hyang, former head of the Kaesong Industrial District Foundation, said, "Our government notified us of the closure of the Kaesong Industrial Complex just three hours in advance," noting, "Ten years have passed since then, but a clear solution still has not emerged." Kim said, "The government should acknowledge the policy failure and present a clear signal on reopening the Kaesong Industrial Complex, along with responsible compensation."
The Kaesong Industrial Complex Corporation Association also asked North Korean authorities to approve visits by businesspeople to the complex, while urging the U.S. government to clarify that visits to North Korea for the purpose of asset protection are not subject to sanctions.
Visits to North Korea related to the Kaesong Industrial Complex and inspections of assets are affected by interpretations of United Nations (UN) and U.S. sanctions on North Korea, and the U.S. policy judgment in particular has been a key variable in whether such visits are approved. The association stressed that easing these sanctions interpretations is necessary for corporations to carry out minimum asset protection activities.